Allowed

Alchemie Pharma Chem Limited v. -

Bombay HC28 Nov 2014CSP/375/2014

Case brief

AI extract

What is this about?

This court sanctioned the Scheme of Amalgamation between Alchemie Pharma Chem Limited (Transferor) and Alchemie Financial Services Limited (Transferee). Finding no objections and satisfied by the applicants' undertaking to comply with regulatory undertakings regarding tax and RBI approvals, the court declared the petitions absolute.

What did the court decide?

Company Scheme Petition No. 375 of 2014 and No. 376 of 2014 are made absolute.

Alchemie Pharma Chem Limited Vs - — Insolvency and Bankruptcy | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY SCHEME PETITION NO. 375 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 161 OF 2014

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Alchemie Pharma Chem Limited

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….Petitioner/Transferor Company

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AND

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COMPANY SCHEME PETITION NO. 376 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 162 OF 2014

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Alchemie Financial Services Limited

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….Petitioner/Transferee Company

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In the matter of the Companies Act, 1956 (1 of 1956);

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AND

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In the matter of Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956;

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AND

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In the matter of Scheme of Amalgamation of Alchemie Pharma Chem Limited with Alchemie Financial Services Limited and their Respective Shareholders and creditors.

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Called for Hearing

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Mr. Hemant Sethi i/b M/s. Hemant Sethi & Co., Advocates for the Petitioners in all Petition.

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Mr. S Ramakantha Official Liquidator, present in Company Scheme Petition No. 375 of 2014.

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Mr. P.S. Gujar i/b Mr H.P. Chaturvedi for Regional Director in both the Petitions.

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CORAM: S. J. KATHAWALLA, J

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DATE: 28^th November, 2014

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Heard learned counsels for the parties. No objector has come

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before the court to oppose the Scheme and nor any party has

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controverted any averments made in the Petition.

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Page 1 of 7

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The sanction of the Court is sought under Sections 391 to 394 and other relevant provisions of the Companies Act, 1956, to the Scheme of Amalgamation Alchemie Pharma Chem Limited with Alchemie Financial Services Limited and their Respective Shareholders and creditors.

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The Transferee Company is engaged in the business as nonbanking financial Company. The Transferor Company is holding investments and loans made out of surplus and funds realised from its manufacturing operations.

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The Counsel for the Petitioner submits that the amalgamation would, inter alia, enable to simplify management structure, leading to better administration and a reduction in costs and focused operational efforts, rationalization, standardisation and simplification of business processes and administration.

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The Transferor Company and Transferee Company had approved the Scheme of Amalgamation in their respective Board Meetings which are annexed to the respective Company Scheme Petitions.

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The Learned Advocate for the Petitioner states that Petitioner Company has complied with all the directions passed in Company Summons for Directions and that Company Scheme Petition has been filed in consonance with the order passed in Company Summons for Directions and seeks sanction to the said proposed Scheme of Amalgamation.

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The Learned Counsel appearing on behalf of the Petitioner has stated that the Petitioner Companies have complied with all Page 2 of 7

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requirements with all directions of this Court and they have necessary Affidavits of compliance in the Court. Moreover Petitioner Companies undertake to comply with all statutory requirements, if any as required under Companies Act, 1956/2013 and Rules made thereunder whichever is applicable. The said undertaking is accepted.

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The Official Liquidator has filed his report on 27^th October, 2014 in Company Scheme Petition No. 375 of 2014 stating therein that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved.

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The Regional Director has filed an Affidavit on 20^th November 2014 stating therein that save and except as stated in paragraph 6(a) to 6(d) of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders and public. In paragraph 6(a) to 6(d) of the Affidavit, it is stated that:

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That the Deponent further submits that :-

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(a) Clause 15 of the Scheme provides for accounting treatment. In this regard, it is submitted that the surplus, if any arising out of this Scheme shall be credited to Capital Reserve Account of Transferee Company and the Deficit, if any arising, shall be debited to Goodwill Account of the Transferee Company.

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(b) The Income Tax Department vide its letter dated 15/09/2014, had reported that the impact of above scheme under the provisions of the Income Tax Act, 1961 is not known/ascertainable at this stage and the tax issue may be kept reserved. Copy of the said is annexed hereto and marked as Exhibit-D. In this

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regard , it is submitted that the tax implication, if any, arising out of this Scheme is subject to final decision of Income Tax Authorities. The approval of the Scheme by this Hon’ble Court may not deter the Income Tax Authority to scrutinize the tax return filed by the Transferee Company after giving effect to the Scheme . the decision of the Income tax Authority is binding on the Transferee Company.

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(c )The Transferee Company is an Non Banking finance Company, registered with Reserve Bank of India as a non-deposit taking NBFC company. It is also noticed that the Transferor Company is having manufacturing activity, however it holds 48.36% of equity share capital of Transferee Company. Besides, the promoters of the Transferor company also holding 37.05% of equity share capital of Transferee Company. It is further observed from the balance sheet as at 31/03/2013 of the Transferor Company that the operative income was only Rs. 37.62 lacs, whereas income from financial activity was Rs 1.94 Crores. Therefore major income was from the financial activity. As the manufacturing company is amalgamating with non-banking finance company, the Transferee Company may be directed to file a copy of the scheme along with the copy of this Hon’ble Court’s order within 30 days from the date of the order, with the Reserve Bank of India and to obtain necessary approval from Reserve Bank of India.

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(d) Clause 19 of the Scheme provides for modification of Scheme wherein the Board of Directors of Transferor Company and Transferee Company have been authorized to make any amendments to Scheme, if necessary, after the Scheme is approved by the Hon’ble High Court. Such liberty shall not be exercised by Board of Directors without obtaining further approval from the Hon’ble high Court. The Transferor Company and Transferee Company shall be directed to undertake to this effect.

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So far as the observation in paragraph 6 (a) of the Affidavit of Regional Director is concerned, the Transferee Company through its Counsel undertakes that the surplus, if any arising out of this

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scheme shall be credited to Capital Reserve Account of Transferee Company and th Deficit, if any arising, the same shall be debited to Goodwill Account of the Transferee Company.

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In so far as observations made in paragraph 6(b) of the Affidavit of Regional Director is concerned, the Transferee Company through its counsel submits that it is bound to comply with all applicable provisions of the Income Tax Act, and other tax issues arising out of the scheme will be met and answered in accordance with law.

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So far as the observation in paragraph 6 (c) of the Affidavit of Regional Director is concerned, the Transferee Company through their Counsel undertakes to file a copy of the scheme along with the copy of this Court’s order within 30 days from the date of the order, with the Reserve Bank of India and to obtain necessary approval from Reserve Bank of India to the extent applicable .

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In so far as observations made in paragraph 6(d) of the Affidavit of the Regional Director is concerned, the Petitioner Company through their Counsel states that Clause 19 of the Scheme gives power to the Board of Directors of the Petitioner Companies to amend any part of the scheme. The learned Counsel for the Petitioner Companies further states that such powers to amend the scheme is subject to final approval of this High Court. It is therefore clarified that power vested under Clause 19 of the scheme will be subject to the approval of High Court.

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The Learned Counsel for Regional Director on instructions of Mr. Chandanamuthu, Joint Director legal in the office of the Regional Director, Ministry of Corporate Affairs, Western Region, Mumbai states that they are satisfied with the submissions and undertakings given by the Petitioner Companies as stated hereinabove. The said undertakings given by the Petitioner Company are accepted.

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From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.

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Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 375 of 2014 filed by the Transferor Company is made absolute in terms of prayer clause (a) and Company Scheme Petition No. 376 of 2014 filed by the Transferee Company is made absolute in terms of prayer clause (a) to (d) of the Petition.

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Petitioners are directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, along with E-Form INC-28, in addition to the physical copy within 30 days from the date of issuance of the order by the Registry.

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The Petitioner Companies to file a copy of this order and the Scheme, duly authenticated by the Company Registrar, High Court, Bombay, with the concerned Superintendent of Stamps, for

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the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the Order.

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The Petitioner Company in both the Company Scheme Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai and the Petitioner in the Company Scheme Petition No. 375 of 2014 to pay cost of Rs.10,000/- to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today.

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Filing and issuance of the drawn up order is dispensed with.

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All concerned regulatory authorities to act on a copy of this order along with the Scheme and the form of minutes duly authenticated by the Company Registrar, High Court, Bombay.

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(S. J. KATHAWALLA, J.)

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Alchemie Pharma Chem Limited v. -

Case brief

What is this about?

What did the court decide?

Alchemie Pharma Chem Limited v. -

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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